Bitcoin's Sharpest Rally in Five Months Flips Markets From Bearish to Coin Flip

In brief

• Bitcoin jumped as much as 8.7% Wednesday to an intraday high of $69,749, its steepest one-day move since March 4 and its highest price since June 1.
• On Myriad, prediction odds flipped from roughly 70-30 favoring a bearish decline to a near coin flip within 24 hours.
• The rally followed a U.S. Treasury plan to double its long-bond buybacks and more than $1 billion in short liquidations wiped out in a single hour.

Bitcoin ripped through $69,000 Wednesday, climbing as much as 8.7% to an intraday high of $69,749. That's the steepest one-day move since March 4 and the highest price Bitcoin has touched since June 1. Traders hadn't seen a green candle like this in more than five months.

So where does Bitcoin go next? The charts have one read, and prediction markets have another. A mere 24 hours ago, traders on Myriad—a prediction market operated by Decrypt’s parent company—were sure there was more pain in store for Bitcoin ahead. Now, it’s a coin flip, with odds moving fast.

What a difference a squeeze makes.

The trigger for today’s big move doesn’t appear to be crypto-native. The U.S. Treasury said Wednesday it will at least double its long-bond buybacks, from $2 billion to $4 billion per operation starting September 9, pushing long-end yields down and weakening the dollar. These types of moves typically bode well for risk assets, like crypto, because they loosen financial conditions—lower yields cut the opportunity cost of holding a non-yielding asset like Bitcoin, and a weaker dollar makes dollar-priced assets cheaper for foreign buyers, the same dynamic analysts have already nicknamed 'QE Lite.'